UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
(Mark One)
x |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2015
or
¨ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 001-36522
Investar Holding Corporation
(Exact name of registrant as specified in its charter)
Louisiana |
27-1560715 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
7244 Perkins Road, Baton Rouge, Louisiana 70808
(Address of principal executive offices, including zip code)
(225) 227-2222
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer |
¨ |
Accelerated filer |
¨ |
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Non-accelerated filer |
x (Do not check if a smaller reporting company) |
Smaller reporting company |
¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
The number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date, is as follows: Common stock, $1.00 par value, 7,292,235 shares outstanding as of August 7, 2015.
3 |
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Item 1. |
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4 |
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Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014 |
4 |
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Consolidated Statements of Operations for the three and six months ended June 30, 2015 and 2014 |
5 |
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6 |
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7 |
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Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014 |
8 |
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9 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
30 |
Item 3. |
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48 |
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Item 4. |
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48 |
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49 |
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Item 1A. |
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49 |
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Item 2. |
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49 |
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Item 6. |
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50 |
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51 |
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52 |
2
S PECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
When included in this Quarterly Report on Form 10-Q, or in other documents that Investar Holding Corporation (the “Company”) files with the Securities and Exchange Commission (“SEC”) or in statements made by or on behalf of the Company, words like “may,” “should,” “could,” “predict,” “potential,” “believe,” “think,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would,” “outlook” and similar expressions or the negative version of those words are intended to identify forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a variety of risks and uncertainties that could cause actual results to differ materially from those described therein. The Company’s forward-looking statements are based on assumptions and estimates that management believes to be reasonable in light of the information available at the time such statements are made. However, many of the matters addressed by these statements are inherently uncertain and could be affected by many factors beyond management’s control. Factors that could have a material effect on the Company’s business, financial condition, results of operations and future growth prospects can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 that the Company filed with the SEC on March 31, 2015 and Part II, Item 1A. – Risk Factors, of this Quarterly Report on Form 10-Q. Additional risk factors may also be described in reports that the Company files from time to time with the SEC.
Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on any forward-looking statement as a prediction of future events. We expressly disclaim any obligation or undertaking to update our forward-looking statements, and we do not intend to release publicly any updates or changes in our expectations concerning the forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based, except as required by law.
3
P ART I. FINANCIAL INFORMATION
INVESTAR HOLDING CORPORATION
(Amounts in thousands, except share data)
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June 30, 2015 |
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December 31, 2014 |
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(Unaudited) |
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ASSETS |
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Cash and due from banks |
$ |
7,541 |
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$ |
5,519 |
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Interest-bearing balances due from other banks |
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16,807 |
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13,493 |
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Federal funds sold |
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191 |
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500 |
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Cash and cash equivalents |
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24,539 |
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19,512 |
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Available for sale securities at fair value (amortized cost of $82,049 and $69,838, respectively) |
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82,236 |
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70,299 |
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Held to maturity securities at amortized cost (estimated fair value of $24,015 and $22,301, respectively) |
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24,230 |
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22,519 |
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Loans held for sale |
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78,212 |
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103,396 |
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Loans, net of allowance for loan losses of $5,728 and $4,630, respectively |
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667,858 |
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618,160 |
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Other equity securities |
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4,183 |
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5,566 |
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Bank premises and equipment, net of accumulated depreciation of $4,662 and $3,964, respectively |
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29,444 |
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28,538 |
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Other real estate owned, net |
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2,519 |
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2,735 |
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Accrued interest receivable |
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2,432 |
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2,435 |
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Deferred tax asset |
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1,624 |
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1,097 |
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Goodwill and other intangibles |
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3,195 |
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3,216 |
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Other assets |
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1,383 |
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1,881 |
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Total assets |
$ |
921,855 |
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$ |
879,354 |
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LIABILITIES |
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Deposits: |
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Noninterest-bearing |
$ |
86,339 |
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$ |
70,217 |
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Interest-bearing |
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619,668 |
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557,901 |
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Total deposits |
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706,007 |
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628,118 |
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Advances from Federal Home Loan Bank |
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79,066 |
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125,785 |
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Repurchase agreements |
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15,130 |
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12,293 |
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Note payable |
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3,609 |
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3,609 |
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Accrued taxes and other liabilities |
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11,170 |
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6,165 |
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Total liabilities |
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814,982 |
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775,970 |
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STOCKHOLDERS’ EQUITY |
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Preferred stock, $1.00 par value per share; 5,000,000 shares authorized |
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- |
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- |
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Common stock, $1.00 par value per share; 40,000,000 shares authorized; 7,293,209 and 7,262,085 shares outstanding, respectively |
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7,295 |
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7,264 |
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Treasury stock |
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(26 |
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(23 |
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Surplus |
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84,358 |
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84,213 |
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Retained earnings |
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15,461 |
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11,809 |
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Accumulated other comprehensive (loss) income |
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(215 |
) |
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121 |
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Total stockholders' equity |
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106,873 |
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103,384 |
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Total liabilities and stockholders' equity |
$ |
921,855 |
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$ |
879,354 |
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See accompanying notes to the consolidated financial statements. |
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4
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share data)
(Unaudited)
5
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)
(Unaudited)
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Three months ended |
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Six months ended |
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June 30, |
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June 30, |
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2015 |
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2014 |
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2015 |
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2014 |
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Net income |
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$ |
1,813 |
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$ |
1,067 |
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$ |
3,763 |
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$ |
1,946 |
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Other comprehensive (loss) income: |
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Unrealized gains on investment securities: |
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Reclassification of realized (gains) losses, net of tax (expense) benefit of $(47), $16, $(47) and $56, respectively |
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(87 |
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32 |
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(87 |
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108 |
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Unrealized (losses) gains, available for sale, net of tax (benefit) expense of $(194), $114, $(51) and $137, respectively |
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(374 |
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334 |
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(96 |
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402 |
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Unrealized (losses) gains, transfer from available for sale to held to maturity, net of tax (benefit) expense of $(1), $6, $(1) and $6, respectively |
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(1 |
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18 |
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(2 |
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18 |
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Fair value of derivative financial instruments: |
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Change in fair value of interest rate swap designated as a cash flow hedge, net of tax expense (benefit) of $44, $0, $(82) and $0, respectively |
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94 |
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- |
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(151 |
) |
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- |
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Total other comprehensive (loss) income |
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(368 |
) |
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384 |
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(336 |
) |
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528 |
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Total comprehensive income |
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$ |
1,445 |
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$ |
1,451 |
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$ |
3,427 |
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$ |
2,474 |
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See accompanying notes to the consolidated financial statements. |
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6
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Amounts in thousands, except share data)
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Accumulated |
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Other |
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Total |
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Common |
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Treasury |
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Retained |
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Comprehensive |
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Stockholders' |
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Stock |
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Stock |
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Surplus |
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Earnings |
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(Loss) Income |
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Equity |
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Balance, December 31, 2013 |
$ |
3,943 |
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$ |
- |
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$ |
45,281 |
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$ |
6,609 |
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$ |
(350 |
) |
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$ |
55,483 |
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Common stock issued in offering, net of direct cost of $4,266 |
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3,285 |
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- |
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38,443 |
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- |
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- |
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41,728 |
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Warrants exercised |
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22 |
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- |
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275 |
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- |
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- |
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|
297 |
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Surrendered shares |
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- |
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(17 |
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- |
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- |
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- |
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(17 |
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Shares repurchased |
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(6 |
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(6 |
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Dividends declared, $0.04 per share |
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- |
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- |
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- |
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(197 |
) |
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- |
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(197 |
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Stock-based compensation |
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14 |
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- |
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214 |
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- |
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- |
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|
228 |
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Net income |
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- |
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- |
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- |
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|
5,397 |
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- |
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|
5,397 |
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Other comprehensive income, net |
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- |
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- |
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- |
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- |
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|
471 |
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|
471 |
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Balance, December 31, 2014 |
$ |
7,264 |
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|
$ |
(23 |
) |
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$ |
84,213 |
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|
$ |
11,809 |
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|
$ |
121 |
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$ |
103,384 |
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Surrendered shares |
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(3 |
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(3 |
) |
Dividends declared, $0.02 per share |
|
- |
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|
- |
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|
- |
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(111 |
) |
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|
- |
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|
(111 |
) |
Stock-based compensation |
|
31 |
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- |
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|
145 |
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|
- |
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|
- |
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|
|
176 |
|
Net income |
|
- |
|
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|
- |
|
|
|
- |
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|
3,763 |
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|
- |
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|
|
3,763 |
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Other comprehensive loss, net |
|
- |
|
|
|
- |
|
|
|
- |
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|
- |
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(336 |
) |
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|
(336 |
) |
Balance, June 30, 2015 (Unaudited) |
$ |
7,295 |
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|
$ |
(26 |
) |
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$ |
84,358 |
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$ |
15,461 |
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$ |
(215 |
) |
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$ |
106,873 |
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See accompanying notes to the consolidated financial statements. |
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7
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
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For the six months ended |
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June 30, |
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2015 |
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2014 |
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Cash flows from operating activities: |
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Net income |
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$ |
3,763 |
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$ |
1,946 |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
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|
719 |
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|
631 |
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Amortization (accretion) of premium (discount) on securities, net |
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|
528 |
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|
509 |
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Amortization of purchase accounting adjustments |
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(121 |
) |
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(184 |
) |
Provision for loan losses |
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1,100 |
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|
693 |
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Provision for other real estate owned |
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|
24 |
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|
26 |
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Gain on sale of securities |
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(134 |
) |
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(165 |
) |
(Gain) loss on sale of other real estate owned |
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(6 |
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7 |
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FHLB stock dividend |
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(7 |
) |
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(3 |
) |
Stock-based compensation |
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|
176 |
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|
84 |
|
Other |
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|
11 |
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|
- |
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Loans held for sale: |
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Originations |
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(210,350 |
) |
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(81,448 |
) |
Proceeds from sales |
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|
238,341 |
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|
55,281 |
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Gain on sale of loans |
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(2,808 |
) |
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|
(1,655 |
) |
Net change in: |
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Accrued interest receivable |
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3 |
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(86 |
) |
Deferred tax asset |
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|
(349 |
) |
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|
90 |
|
Other assets |
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|
533 |
|
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(42 |
) |
Accrued taxes and other liabilities |
|
|
4,759 |
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|
|
1,920 |
|
Net cash provided by (used in) operating activities |
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|
36,182 |
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(22,396 |
) |
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Cash flows from investing activities: |
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Purchases of investment securities available for sale |
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(24,095 |
) |
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(29,559 |
) |
Purchases of investment securities held to maturity |
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(2,182 |
) |
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|
(7,470 |
) |
Proceeds from the sale of investment securities available for sale |
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|
6,217 |
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|
16,497 |
|
Proceeds from paydowns, redemptions and maturities of securities available for sale |
|
|
5,248 |
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|
4,172 |
|
Proceeds from paydowns, redemptions and maturities of securities held to maturity |
|
|
449 |
|
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|
27 |
|
Proceeds from sale of loans |
|
|
- |
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|
|
61,745 |
|
Proceeds from redemptions of other equity securities |
|
|
5,355 |
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|
348 |
|
Purchases of other equity securities |
|
|
(3,966 |
) |
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|
(1,734 |
) |
Net increase in loans |
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|
(51,093 |
) |
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|
(121,471 |
) |
Proceeds from sales of other real estate owned |
|
|
561 |
|
|
|
539 |
|
Purchases of premises, equipment and software |
|
|
(1,604 |
) |
|
|
(3,609 |
) |
Net cash used in investing activities |
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|
(65,110 |
) |
|
|
(80,515 |
) |
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|
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Cash flows from financing activities: |
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Net increase in customer deposits |
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|
77,942 |
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|